EghtesadOnline: To help improve the quality of low-sulphur fuels and its compliance with the International Maritime Organization’s new rules (sulphur content no more than 0.5%) took effect on Jan 1, a refinery will start work in Bushehr Province in the near future, managing director of Kharazmi Technology Development Company said.

“The company in cooperation with the Oil Industry Pension Fund, has indigenized the technology to produce the fuel,” Jalil Sobhani was quoted as saying by ISNA.

The first phase of the plant will produce 500,000 tons of low sulphur bunker fuels a year and output will double in the second phase, Financial Tribune quoted him as saying.

The new IMO rules has forced international bunker fuels to meet a much tighter maximum sulphur specification of 0.5%, versus 3.5% in previous years.

“This change aims to effectively eliminate one of the largest sources of sulphur oxides emissions, accounting for roughly 10% of the global total from all sources.”

Although exhaust gas scrubbers on ships will cover some of the requirement, along with a very limited amount of LNG bunkers, the vast majority of demand will need to change to low sulphur bunker fuels.

According to the official, Iran's shipping fleet needs at least 2 million tons of mazut annually, which should be replaced by low-sulphur fuels.

Referring to other measures to provide domestic shippers with the quality fuel, he said several refineries including Shazand Refinery in the central city of Arak, Markazi Province are being retrofitted to either reduce mazut output or produce it with less sulphur.

Nouri Petrochemical Company in southern Bushehr Province will start producing low-sulphur fuel from March. Machinery and equipment in the plant are being upgraded to decrease current sulphur levels in mazut and diesel from 3.5% to 0.5%. The company has invested $120 million to build a (heavy end) refinery in which sulfur content in mazut and diesel will be reduced to less than 0.5%.

Regarding alternatives to achieve a compliant fuel oil, he said ships can use engines that run on different fuels such as LNG or biofuels.